Colorado Public Employees Retirement Association, Denver, announced Tuesday a settlement with the city of Colorado Springs to resolve a lawsuit that resulted from a hospital system leaving the state's public pension system.
The city of Colorado Springs has agreed to pay the $45.3 billion pension fund $190 million for the liabilities associated with Memorial Hospital Systems, which exited PERA in October 2012, a PERA news release said.
A trial had been set to start in October.
The exit was the result of Colorado Springs leasing operation of the hospital to the University of Colorado Hospital Authority, which is a non-governmental entity and ineligible for participation in the state's public pension system.
Under state law, any local government that wishes to withdraw from Colorado PERA must pay for the accrued, unfunded liabilities of its retirees and employees before leaving the system. The city had argued it could exit as long as it was current on its payments at the date of withdrawal.
The Colorado Springs City Council voted to approve the settlement on Tuesday, according to a news release provided by Colorado Springs spokeswoman Vicki L. Gomes.
“One of the important elements from the lease with UCH was the creation of the Colorado Springs Health Foundation. The foundation was established with the intent of improving the health and quality of life of the community. This agreement will allow the foundation to begin the important job it was designed to do — fund grants to provide quality health care to those who would otherwise not have access, and to encourage healthy living,” said Jan Martin, city councilwoman, in the news release.